Optimism widespread amongst the Port of Tampa steel conference attendees

Saturday, 03 March 2007 18:04:19 (GMT+3)   |  
       

Approximately 500 people in the steel and logistics industries this week attended the Port of Tampa's 18th Annual Steel Conference to discuss the Port of Tampa's role in the steel industry as well as the future of the steel industry itself. The Port of Tampa, which is the largest steel-importing port in the state of Florida, taking in approximately 800,000 net tons of finished and unfinished steel products in 2007, has opened a new 96,000 square foot warehouse to cater for the increasing amount of steel cargoes. The conference commenced Monday with the ribbon cutting ceremony for the new warehouse at the Port of Tampa's Berth 206, on Hooker's Point. “This facility shows a solid commitment to the port's investment in maritime development and to the continued growth of our general cargo activity,” said Richard Wainio, Tampa's port director and CEO. “We want to send a clear message that Tampa will continue to be Florida's hub for these cargoes for many years to come,” Mr. Waino said. Including the new warehouse, the port's total cargo storage capacity is nearly one million square feet. After the Opening Reception Monday evening, the conference continued Tuesday morning with presentations from Charles Bradford, president of Bradford Research; John Correnti, president and CEO of SeverCorr; David Jeanes, senior VP/market development of the American Iron and Steel Institute (AISI); and Lewis Leibowitz, partner at Hogan & Hartson, LLP. Charles Bradford's speech, “2007/2008 Outlook for Steel,” outlined some very interesting points. Two things Mr. Bradford says the steel industry doesn't need to worry about in the next couple years are the economy, and, surprisingly, China. Mr. Bradford says that 2007 and 2008 will both be strong years for the US economy, with recession unlikely during these years. He also believes that China is not as big a threat as some consider it to be, since its growth is slowing somewhat and its steel prices are going up. However, Mr. Bradford believes, along with most steel market players, that the price increases that have recently been announced by US steelmakers are largely cost-driven, and don't indicate that demand has picked up tremendously. Issues that may have major impacts on the steel industry in Mr. Bradford's expert opinion are the proposed healthcare legislation, which could provide relief for the healthcare costs of the big integrated steel mills, as well as the coming auto labor negotiations, the outcome of which may pose a serious problem to the steel industry. Greenhouse gas control will also add costs for steelmakers. John Correnti of Severstall told the audience in his speech entitled “The Next Generation in Steel Making” that he believes that '07 will be a good (but not great) year for steel. He also does not see Chinese steelmakers as a major threat to the US steel industry. He said that while labor is cheaper in China than it is in the US, China hires many more people to produce the same amount of steel that is produced in the US. China also has higher electricity rates and higher freight rates. Mr Correnti stressed to the audience is that what matters most is the net cost, per ton of steel , which is lower in the US when all of the aforementioned factors are considered. He noted that even with US steelmakers producing at full capacity, US steel demand still exceeds US output, which leaves plenty of market share for import steel. Severstall's new Colombus Mississippi plant will be shipping steel by August, Mr. Correnti said. When asked what he thinks about rival ThyssenKrupp going to the South, he answered he was not worried because he would be surprised if Thyssen starts producing steel at its new location by 2010. David C. Jeanes of AISI discussed the industry group's five-year business plan to show potential steel customers that steel is more cost-efficient and competitive than other alternatives, such as wood for building framing and aluminum for car design. The group is currently in the process of carrying out its “Build Back Better” strategy for the re-construction of the Gulf Coast. Lawyer Lewis Leibowitz discussed the public policy aspects of the steel trade. His main points were: in the steel industry, increasing imports have accompanied prosperity; manufacturing job losses have actually been accompanied by significant productivity gains, and that limiting imports will encourage more jobs to move overseas. In general, the conference-goers enjoyed themselves immensely, and exhibited a bullish attitude about the future of the US steel market. As is evident every year at its annual steel conference, and especially this year, following the 22 percent increase in steel cargoes in 2006 compared to the previous year, the Port of Tampa continues its legacy as an established and desirable destination for steel cargoes. The major source of foreign steel coming through the Port of Tampa is China, shipping 267,215 net tons of coils to the Port in 2006, 67,744 nt of pipe, and 31,662 nt of wire rod. Other major sources for steel coming into the Port are India, Turkey, Korea, and South America. The top steel traders who use the Port of Tampa are MAN Ferrostaal, Itochu, Arcelor, Sunbelt, Dongkuk International, Toyota Tsusho America, Stemcor, SEBA International, Duferco, Cargill Ferrous, Corus International, and Sumitomo.

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